Kerry Reports 2010 Financials

Posted: February 22, 2011

Kerry (Tralee, Ireland) reported its preliminary results for the year ended Dec. 31, 2010. Among the results, sales revenue increased to €5 billion, up 9.7%, and there was a 5.5% increase in continuing business volumes. Additionally, trading profit increased 11.3% to €470 million, and the ingredients and flavors trading margin increased 50 basis points to 10.9% while the consumer foods trading margin was up 40 basis points to 7.5%.

Commenting on the results, Kerry Group CEO Stan McCarthy said, “Kerry Group achieved excellent results in 2010. Business development in the group’s established and emerging markets proved highly successful, delivering strong volume growth and good margin progression. We achieved a 16.8% increase in earnings per share to 194.5 cent. Taking into account the phasing of raw material cost recovery and exchange rate variability, we expect to achieve growth in adjusted earnings per share in 2011 to a range of 210 to 218 cent per share.”

The company also noted in its chairman’s statement that strong business volume growth was achieved throughout the group’s established and emerging markets. The group’s ingredients and flavors global business continued to enhance its leadership position across food and beverage end-use markets through innovation, driven by Kerry’s broad technology capabilities and integrated approach to meeting customer requirements. In particular, the group benefited through increased integration of Kerry’s flavor expertise in a wider range of food and beverage applications in response to increasing demand for all-natural solutions and clean product labeling.

In the group’s selected consumer foods business segments of the UK and Irish markets, sectoral growth continued to be impacted by reduced consumer spending and push-back to higher prices. Trading down to value offerings continues to be the predominant market trend. In 2010, this continued to drive value sales through promotional activity and also benefit private label offerings. However, Kerry Foods achieved strong top line growth in the UK market through its branded and private label offerings. In Ireland, as consumer sentiment remains cautious due to the prevailing economic conditions, the consumer foods market remained challenging in 2010. Targeted brand and range investment by Kerry Foods tailored to consumer requirements in Ireland has stabilized the positioning of Kerry’s key brands and protected the brands’ category leadership for future growth. Due to the success of the group’s ‘go-to-market’ strategies and necessary investment in additional manufacturing capacity to meet customer requirements, capital expenditure in 2010 increased to €139m (2009: €108m), and investment in research and development increased to €156m (2009: €148m).